All HAFA Short Sale Programs Are Now Up And Running
05. Aug, 2010
11 Comments
On April 5, 2010, the HAFA program became mandatory for all for non-GSE (non-Freddie Mac and Fannie Mae loans) servicers participating in the HAMP program. According to the Making Home Affordable Program Servicer Performance Report issued on July 26, 2010, although some of the servicers were slow to implement the program, as of the end of June 2010, all of the eight largest servicers in the country have started offering HAFA short sales to homeowners.
Additionally, on August 1, 2010, the new Fannie Mae and Freddie Mac HAFA programs became mandatory for all servicers of Fannie Mae and Freddie Mac loans. The new Freddie Mac and Fannie Mae HAFA programs, as implemented on August 1, 2010, did not change of the guidelines that were issued on June 1, 2010. Now, all three HAFA programs are in effect and fully operational. However, there are some differences between each of the programs that are important for agents to understand that affect provisions ranging from borrower eligibility to real estate commissions. To see a chart outlining some of those differences, click here.
With Freddie Mac and Fannie Mae HAFA programs in effect, the eight largest servicers in the country who also participate in HAMP for non-GSE loans they service now control the vast majority of homeowner loans in this country and have overnight made HAFA a significant part of the short sale arena. For your information, those eight servicers that are now offering the HAFA program to borrowers are:
- America Home Mortgage Servicing
- Bank of America
- CitiMortgage
- GMAC Mortgage
- JP Morgan Chase Bank
- Litton Loan Servicing
- One West Bank
- Wells Fargo Bank
If any of your listings involve one of those servicers, you can be assured that they have a HAFA program in place. Additionally, all other non-GSE servicers and lenders (non-Freddie Mac and Fannie Mae) that participate in the HAMP program also must now have their HAFA program available. For a current list of those other servicers and lenders that are subject to the HAFA program, click here, and see page 11.
As can be expected with the implementation of any new national program of this size, there are some kinks in getting everything running smoothly. Some agents are experiencing longer delays than anticipated while the servicers’ employees are educating themselves on the HAFA process, forms and procedures. With additional training and time, these issues will work themselves out and HAFA may finally provide the solution for standardized and fast short sales that the real estate market has been looking for the past several years.
Author
I have a homeowner that is upside down, lost job no income, no reserves has made no payments for several months. Bank of Am is their servicing agent, I have listed the property and contacted Bank of Am to ask if they would no go under the new program to which the answer is no. “They didn’t quailfy” I’m confused on how they don’t quailfy. Help
It is tough for me to guess why they didn’t qualify for HAFA. Depending upon the investor who owns the loan that BofA is servicing for, there are three different HAFA programs with differing disqualification rules. You need to get more specific information from BofA and find out who owns your client’s loan so you can go directly to them if you have to.
I have a question and a concern. I am working on a short sale where my seller has a Fannie Mae backed loan with Bank of America. I want to start processing her through the HAFA program but she has a foreclosure sale date of Sept. 21st. I read that if the foreclosure sale is within 60 days, the seller may not qualify for the Fannie Mae HAFA (or Fannie Mae has to give approval, don’t know on what terms). Also, I read somewhere else that the seller would have to make 3 monthly payments to go through the HAFA. Are any of these two true? Thanks in advance for your insight on the HAFA program.
The guidelines for the Fannie Mae HAFA program do state that a borrower can’t be offered a HAFA short sale if there is a foreclosure sale scheduled withinn 60 days without written approval from Fannie Mae. (Fannie Mae doesn’t specify what the grounds for an exception may be). Your client should ask for HAFA consideration and ask the servicer to seek a waiver of the 60 day rule from Fannie Mae.
The 3 monthly payment rule is the minimum standard for converting a trial HAMP modification into a permanent one. A seller at their option can elect to bypass HAMP altogether if they want to without making any payments.
The other provision you may be referring to with the 3 payments is the possibility of the seller being required to make partial mortgage paynments during the listing period until the property closes, but there is no specified minimum number of payments.
im sure the hafa program works great but i have a 80/20 loan and my first is good who is b of a but my second who is sls does not want to participate. i have had a offer on the table since april and its not working so far. im not exactly sure how everything works but i think the government is giving the banks too much control. isnt that how we got in this slump in the first place?
Like HAMP, the HAFA program was set up as a first lien program. Second lienholders are not required to participate but to entice them, they tossed in the $6,000 incentive. Unfortunately, when the second doesn’t want to participate in HAFA, there is no way to force them to do so at this time.
More pressure is being put on the seconds to participate in the HAMP program through the 2nd Lien Modification Program (especially if they took bailout money), but there is nothing more in the works for HAFA at this time.
Do the same short sale guidlines as far a paperwork still apply or are there different forms to be completed.
And will this automaticly happen or does the real estate agent need to apply differenly to the lenders above.
All three HAFA programs have very similar forms. However, they are different enough that you need to use the correct forms for the particular program. When your client is offered a HAFA short sale you will be sent the apprpriate forms.
Many servicers are now automatically screening borrowers for HAFA eligibility. (They are required to do so under the program.) However, if your client is interested in the program, they should request HAFA consideration early in the process to make sure they aren’t overlooked. If your client is determined to be HAFA eligible, the servicer will send you the HAFA forms for the particular program that applies to your client.
As always you supply up to date valuable information. Thank you for posting.
WHY IS IT IF hAFA WAS IN EFFECT jUNE 1ST 2010 AND CITI mortgage drug out closing, even though the buyer was fully approved, until finaling completing on Aig.2nd 2010.
They now say they did not approve the HAFA
program. is that legal? I thought all of
the Mertgage banks that were bailed out had to participate in Hafa.
It is really difficult to answer questions about specific transactions. Especially trying to guess why banks and servicers make the decisions they do. It sounds like you started the Citi short sale program before HAFA took effect. Once HAFA started your client is not automatically included in HAFA. The seller has to be reviewed for eligibility and specifically offered a chance to participate in HAFA and a SSA must be signed by the Seller, Servicer and Broker. Otherwise, it is just a traditional short sale. If your client was HAFA eligible and you started the short sale process after HAFA took effect then they could have a right to complain.